We are energy-rich. Now we need the right route-map

Here is a fair bet: you want to be able to go from any A to any B any time; you want your house warm in winter and cool in summer; you want your workplace to work; and you want all of that 24/7.

Here is what the gloom industry tells you: “You can’t have all of that any more — not forever anyway; what you do get will cost you more in several ways; and there will be interruptions.”

Here is what some suppliers will tell you: “The future is bright (some add “long-term”); but getting there might not be easy; and my route-map is the best way there.”

Here is what the government will tell you in its yet-again-rejigged energy strategy on Friday: the issues are complex; but the future in this energy-rich land is promising if we do the right things on the way; here is a suite of regulations, taxes and other instruments for the next six years and another suite for after that, looking out to 2030 and then to 2050 — though as yet no promises even then to meet Helen Clark’s October 28 mooted aspiration for “carbon neutrality”.

Energy is complex because it is now entwined with climate change. Friday’s draft for consultation is in fact the first major item in the reworked climate change policy, now sadly overdue by the yardstick of the government’s own rhetoric of the past eight years, ramped up by Clark in October into a badge of “national identity”.

Climate change tangles energy into other Gordian knots — for example, land use policy, due in a fortnight.

This tangos with the self-interest of foresters and farmers, including in forest sinks, who owns the carbon credits (and liabilities) in trees, how tradable they can be, whether we can just load more and more cows on previously forested land and who pays for the muck.

Clark has behind the scenes begun a drive to get farmers to see beyond next year’s payout to their own need to preserve the clean-green brand against attacks from northern hemisphere competitors, protectionists and middle-class moralisers.

Fifty years ago, energy policy came down to one word: more. Now, oil and other fossil fuels, such as coal, are branded the climate’s enemy No 1. And a rising proportion of our electricity is brewed from that potion.

The good news is that we are energy-rich. All we need is the technology, the infrastructure and the investment.

We have many generations worth of coal from which to make electricity and, later perhaps, produce hydrogen as a fuel for electricity generation and/or mobility. Greens say coal is dirty but there are realistic possibilities for practical (though expensive) technologies to take out most of the carbon.

We have lots of wind (though also lots of nimbys). We have vast expanses of waves and tides if the Scots can solve the technical problems. We have steam in abundance and new technologies.

And we have sunlight from which to power houses and farms and the ability to self-supply small communities (“distributed generation” in the jargon), if the big generating companies will make room.

So long-term we should readily be able to keep the lights on, houses warm/cool and, when (if?) cars that run mainly on electricity become available, go from As to Bs.

The bad news is that most of this is 20, 30, 40 years away. Much of the technology is unproven and/or uncommercial. Meantime expect oil price spikes, international protectionism against our distantly produced agricultural exports and unpredictable upsets.

We do have lots of land to grow materials for ethanol and biodiesel, which Friday’s strategy will tell us to put in our fuel (even though our Japanese fleets are not yet warrantable for the stuff). If we fall short, developing countries will happily cut down forests to grow biofuel crops and the United States and Europe will obscenely subsidise farmers to divert food crops into fuel.

Friday’s strategy will focus on biofuels as a transition to show the world now we mean business about climate change. It will set a more ambitious target than the current 2.25% by 2011.

Since the transition to an electric and/or hydrogen future will be very long and is in any case uncertain, there will likely develop here a biofuels industry of sorts. In that case, the best option, given our vast land and forest resources, is for cellulosic (non-food) biofuels. But commercially viable technology for that is not here yet.

So a good part of the overall energy focus has to be on conservation and efficiencies, on which Jeanette Fitzsimons, as the government’s spokesperson, has made a tentative start. A new report by the McKinsey Global Institute reckons world energy use growth of 2.2% a year could be cut to 0.6% a year by 2020 by more aggressive energy efficiency efforts.

It all sounds a bit grim, nanny-state stuff with strictures, regulations and government taxes. Friday’s strategy will have a limited carbon tax through to 2012 and an economy-wide one after that.

And full-on carbon trading? A world system will evolve. Markets do what governments cannot.